Extended crisis: fall in mortgages and more repossessions

The country will not recover from the property crisis in 2011 and certainly not until 2012 or 2013 at the earliest. Moreover, some pessimists like the IMF, forecast a long period of crisis up to 8 more years.

The latest data does not give room for hope. The mortgage market is getting tighter and tighter in Spain. The rate has dropped in 4 consecutive months since May 2010 compared with the same period in 2009. The fall in May was -2.9%, in June, -10.8%, in July -6.8% and August -3.4%.

Repossessions are becoming a major problem. The direct effect of repossessions is that it enlarges Banks portfolios even more putting extra pressure on the market. During the 2010/1Q repossessions reached a new peak from 2007: 27,561. Banks now have a repossessed property asset portfolio worth 20.5 billion euros.